Inflation is not good for business. While low interest rates from the Federal Reserve are intended to stimulate borrowing and lending, which would help businesses, chronic high inflation weakens currency value, making goods less affordable for customers. Even with low cost loans, businesses struggle if fewer customers can afford their products. Despite years of low rates after the recession, the US has seen only modest growth below 3%, indicating artificially low rates do not effectively create a borrowing market or stimulate recovery when inflation reduces customers' purchasing power.

1. Is inflation good for business?
So we have already gone over inflation along with the cause and impact it has not only the
economy but more on the average person. People will often try to argue in favor of the federal
reserve either due to a lack of knowledge or due to being misguided. Many people will say that
having a centralized banking system with one entity controlling it allows us to control interests
rates which is good for business. The way this is supposed to work is simple in the fact that the
Federal Reserve will through either the US Treasury or private banks will print money and then
give out loans. These loans will often be low or nearly zero interests in times where they feel
stimulation is needed. This is supposed to create more borrowing by making it so banks will give
out loans with lower interests to business especially small to medium sized. While in theory this
all sounds good like many other things in reality it doesn't work nearly as well. The reason why
is simply because like we have discussed before when to much money is printed the value of it
goes does which causes creation. This in turn weakens the value of the currency. With less
value to the money it is harder for people to accumulate wealth so people are less able to buy
things which means less profit for business. So in the end even if business's can get low interest
loans from banks to expand it does very little if they have less and less customers who can
afford their products. We have seen this since the recession which has been hitting the USA for
the last few years.
For years now the Federal Reserve has kept interest rates at record low rates in an attempt to
help stimulate recovery. Despite this the USA has seen very little in the way of real growth or
improvement with most estimates showing a growth rate of less then three percent for the
economy. So the short answer is that no inflation is not good for business or for anyone. With
less inflation more people could afford to buy products and services.
The argument that keeping interests rates low is clearly not true as well. If it was profitable for
banks to adjust interest rates then they will adjust it to lower levels accordingly which is
profitable. But the system of artificially trying to create a borrowing market with no customers
clearly will not work. Although the Fed has reported that they will continue to keep interests
rates at record term lows for a long time to come even they cannot explain why we haven't seen
a real recovery or growth yet.
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